How to Improve the Value of Your Self Storage Property in 2022
With the New Year practically upon us, you may be planning to sell your self storage property in the foreseeable future. If you are thinking in this direction, you’ll want to make any possible improvements to ensure that you maximize your sales proceeds.
To begin with, you’re probably anxious about the cost. Don’t be overly concerned. Some renovations will require capital expenditures, but any number of small upgrades can be done without excessive expense. Basic improvements, like painting the facade, updated landscaping, or roof repairs, can make a big difference to potential buyers. If you’d like to know more about all things self storage, reach out to Pinnacle Storage Properties.
Following are a few suggestions to help you increase the value of your self storage facility before you go to market.
Renovations to Improve the Value of Your Self Storage Property
Expand Your Property
Empty space is not a draw to self storage buyers. If you have the extra space, building self storage units, especially climate-controlled units, will attract buyers as well as tenants who need temperature control.
Before you undergo a massive expansion project, be sure to consider the following factors:
- Supply – How much competition is present in your market? If the market is highly saturated, you may want to rethink an expansion.
- Demand – Does your facility have consistently high occupancy rates or are you slow in renting units? If you are at least 80% occupied with top rental rates, an expansion could help to satisfy your demand.
- Demographic Changes – Has your market had an influx of people or are you losing population? If your market has grown, an expansion could meet your demand.
- Construction Costs – Carefully consider whether the cost of improvements exceeds the benefit of increased value.
- Timeline – How long will your expansion project take. A large undertaking may not work within your timeframe.
If a large expansion project is not financially feasible for you, add extra parking spaces. If your lot is paved, and you have the room, extra outdoor parking spaces may be a better option than an expansion. Your only cost would be painting the lines. If your lot is not paved, but you have the available land, using gravel would be a less expensive option.
Improve Occupancy with the Right Marketing Strategy
Buyers will carefully examine your occupancy data, and one of the most important steps that you can take to improve occupancy is to increase your web presence. Maximize your online presence by improving Search Engine Optimization (SEO) with a tailored digital marketing campaign. An effective campaign will promote your business on search engines, social media platforms, and third-party websites. Incorporate reviews into your sites to show your audience what people are saying about you. You’ll boost your credibility and your occupancy. A contactless, online rental platform will give potential customers the convenience of being able to rent a unit while relaxing in their living room. Meeting your customers online will increase your occupancy and your revenue.
To keep your property at its best and ready for potential buyers, keep up with necessary maintenance. Cracked asphalt, peeling paint, dirty hallways, broken doors, and unkempt landscaping will chase away buyers. Keep the office clean and tidy and be sure that the landscaping is well-maintained and the doors and windows are clean. Have the right mix of security features, including adequate lighting, electronic gates, and video surveillance. You only get one chance to make a first impression.
Steady cash flows add value to your property. A high delinquency rate is unattractive to buyers and will decrease cash flow. To avoid this, be consistent with collection calls, and be careful when initiating the lien process. Keep detailed records and be familiar with your state lien laws. If not handled correctly, collection problems can turn into legal problems.
Be Creative with Your Unit Mix
Think about how you can optimize your space to increase occupancy in your market. If you have too many unoccupied large units, convert them into smaller units. The same goes for too many unfilled small units. You can easily remove partitions and create large units to increase occupancy and generate income.
Use Tiered Pricing
Tiered pricing is a strategy to incentivize your customers. For example, a store manager can upsell a customer to a storage unit in a prime location. Consider charging higher prices for your more convenient storage units – those in the front of the facility or first-floor units in a multistory building. On the other hand, a sale can be saved by offering a less expensive unit on an upper floor or in the back of the property.
Large and small changes can increase the value of your self storage property over time. Your hard work, improvements, and diligence will pay off with the added value of your facility and maximized proceeds at the time of sale.